FDIC Creates a Deposit Insurance National Bank of Santa Clara to ProtectInsured Depositors of Silicon Valley Bank, Santa Clara, ...
FDIC Creates a Deposit Insurance National Bank of Santa Clara to ProtectInsured Depositors of Silicon Valley Bank, Santa Clara, California
Can someone explain in baseball or football terms?
How's this. Banks are like teams, that need to have cash on hand to pay their players. Over the last year due to various reasons (like interest rates going up), Silicon Valley team owner cash has been drying up. They need enough available cash to pay the players, keep the fans, and operate.
Desperate, they began selling assets. Many of them are not quickly sale-able, like memorabilia (Bank Assets, stock shares), so their price collapsed and they didn't raise much. (Firesale).
But the players and fans (Depositors) were not impressed. Looking back, the owners could have done more to keep them happy like lower ticket prices (raise depositor interest rates etc). The fans started to leave; the Silicon Valley owner earns less, and has less available cash. (Silicon Valley Depositors leave, and bank has less available cash)
Then it happened. Players demanded salary for the game but the owners didn't have enough. (Depositors couldn't withdraw their cash). The players walked out. The Silicon Valley team (the bank) had crashed.
So what about all those player contracts? What about all the season ticket holders (other Depositors) who paid to see games that wouldn't happen? There was only one help- the League (the FDIC). They will try real hard to cover the folks they care about (covered depositors). But all the rest, many players and fans who had invested a lot (non-covered FDIC depositors)? They're on their own.
In this case, the FDIC says that as of 1/1/23, $150B / 175B of depositor's money was NOT insured and could be lost. Some of that $150B was withdrawn in the last 2 months through season ticket refunds (withdrawn deposits), but probably not all of it. So most of Silicon Valley's players and fans won't get back the $billions that they put into the team.
Wow! Great analogy!
That’s awesome, lol. Well done.
Bingo, and just like 1929 the doors will shut in our faces.
👍🏻
This should be stickied!
I had to pull all of my money out of the market. I went from a 19% gainnoverall on my portfolio to a 1.5% loss and that was all I needed to say get out. Then I look today and I am talhankful. I would have lost another 19% by this moment. I think it’s habbening. Bitcoin is crashing too.
I pulled out of the market when Biden stole the election. 2.5 years ago , I sold a property in Florida and took the proceeds and purchased silver , weapons and food stores. I did buy another house in Ohio, on credit. Yes the shit is hitting the fan now , stock up on dry goods and ammo.